Suppose an economy has the following production function: Y = A × K1/4 × H3/4. Which of the following is true of this economy?
A) Production in this economy exhibits increasing returns to scale.
B) Production in this economy exhibits decreasing returns to scale
C) Production in this economy exhibits constant returns to scale.
D) Production in this economy decreases when the price level increase.
C
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Which of the following is a major macroeconomic goal?
a. Low prices b. Fair prices c. Pure competition d. Low unemployment e. High prices
Which statement is false?
A. The break-even point lies on the firm's short-run supply curve. B. The firm's short-run and long-run supply curves both run along the marginal cost curve. C. In the short run a firm losing money will operate if the price is between the break-even point and the shutdown point. D. The lowest price acceptable to a firm in the short run is at the break-even point.